lost pension contributions

toscat

My sister worked for a company and joined their pension scheme. She left just under 3 years with them and when she asked if the pension could be transferred to her new job she was told because she worked for under 3 years she would lose the contributions she made and they would go to the government. She would appreciate any advice or information anyone can give her

Debt_Free_Chick

When did she leave? The rules have changed over the years, so the date of leaving is critical.

Patsy80

I worked in the financial planning environment for several years and was never aware that your pension contributions could just be forfeited in such a situation!!! Your sister may not be able to transfer the benefits of an occupational scheme to her new employer (as they may not be able to receive them) but surely the occupational benefits would be preserved until she reached her retirement age. I would suggest looking at the Pensions Advisory Service website.

thenudeone

If she has made contributions herself, then they will almost certainly NOT be lost.

She will either get a refund of contributions OR a deferred pension OR the option to transfer them into another scheme within a certain time.

However, if all of the contributions were paid for by the employer (i.e. a non-contributory pension, which sometimes happens especially in financial firms) then that may not be transferrable, because she hasn't paid anything in to it. The cut off period is often 2 years of scheme service. If the scheme is a final salary scheme with, say, a 1 year waiting period before joining, it could be about right.

We would need a bit more information about the scheme type, employee / er contribution levels, length of her pension scheme membership, and scheme rules regarding leaving service, to give more help.

RichandJ

thenudeone wrote: »

We would need a bit more information about the scheme type, employee / er contribution levels, length of her pension scheme membership, and scheme rules regarding leaving service, to give more help.

This.

Cut off period for final salary schemes is 2 years by law. We'd need dates of pension scheme service (not necessarily the same as employment dates) to help further.

toscat

Sorry for not getting back sooner,been ill. Thanks for all the help. My sister worked for Kodak Ltd from 1993 to 95 but was just under 2years employed. She did pay contributions and when she left to work with the local council she asked what would happen to her contributions would they be transferred or would she get them back. She was told as she was under the cut off time all contributions would go back to the government. It only recently came up in conversation and everyone was telling her that it was her money and she should get it back and I decided to ask for help from forum members.She's recently retired through ill health at 56 and does get a pension from the local council. Thanks again for all the advice

thenudeone

Doesn't sound right at all.
An individual's Pension contributions never go back to the government and never have, AFAIK.

If it was a contributory scheme her contributions should have been returned (less a tax charge) when she left.

Is it possible that the contributions were paid back in her last payslip or pay cheque? It might have got confusing as there may have been other adjustments such as accrued holiday pay or notice pay in that payslip.

It's possible (but unlikely) that there is an untraced deferred pension in the Kodak scheme for her. It would be worth a phone call to ask the question.

toscat

Thanks for the quick reply. My sister is going to write to the Kodak pension scheme and ask them to trace her employment with them and what's happened to the contributions made,though it might be difficult after 20 years.she didn't want to contact them without getting some advice first so thanks to everyone for their help.

bilbo51

The fact that it's Kodak may make things a little problematic. The US company filed for chapter 11 earlier this year, but I've not seen anything since...

http://www.thisismoney.co.uk/money/markets/article-2092381/Troubled-Kodak-faces-1bn-British-pension-claim.html

atush

Kodak UK still has to comply with UK law, so chapter 11 should not affect her so much.

I think it is possible that they refunded her the contribs Less the tax and NI which went back to the govt. She may not have noticed it in the redundancy package, but the company should be able to confirm. It could have been a fairly small sum of the total pension.

Loughton_Monkey

Just a random thought, that could apply.

My first company pension was 'non-contributory', but the 'death in service' element was positioned as a "Widow's Fund Contribution" for which we had to pay.

Had I left within 2 years (I didn't) my understanding is that I would have received no pension entitlement, and no refund of contributions, because technically they were not contributions to the official pension scheme. Quite a canny 'ruse'!